I was adding the context-menu in the item renderer and was totally confused what to do. I keep on following different blogs but all repeat what adobe-help page was stating. Then I played up with the example taken from flexexamples blog.

I noticed one thing that when I replace Panel with BorderContainer my contextMenu was working :O But when I tried to create some skin and assign that skin to this BorderContainer, again the same problem.

After a lot of browsing here and there, I came to know that this is a bug with Spark panel and TitleWindow. Shocking :O